OBITUARIES; Robert A. Derzon, Health Official, Dies at 78

By DENNIS HEVESI

Published: June 28, 2009

Robert A. Derzon, the first director of the federal agency that manages Medicare and Medicaid, died June 17 in Orangeville, Ontario, where he was visiting a friend. He was 78 and lived in Mill Valley, Calif.

The cause was swine flu, Mr. Derzon's son Mike said.

Mr. Derzon, who had previously been deputy commissioner of New York City's Department of Hospitals, was chosen by President Jimmy Carter in 1977 to head what was then called the Health Care Financing Administration. Now called the Centers for Medicare and Medicaid Services, the agency was created in March 1977 to coordinate the two programs, which since they were created in 1965 had essentially been run separately. Medicare, for the most part, provides health insurance for people 65 and over, and Medicaid provides insurance for poor people.

In his two years as director, Mr. Derzon faced the difficult task of minimizing fraud and abuse in the programs and the apparently insurmountable task of slowing the soaring rate of hospital cost increases. His cost-cutting suggestions were sometimes controversial.

In a memo sent on June 4, 1977, to Joseph A. Califano Jr., the secretary of Health, Education and Welfare at the time, Mr. Derzon suggested that the federal government adopt a ''living will'' law similar to one enacted by California. Living wills permit patients to authorize their doctors to terminate life-support systems when there is no chance for a cure or recovery. He also favored Medicaid financing of abortions for mothers on welfare.

Throughout his career, Mr. Derzon was a proponent of universal health care coverage. In 1969, when he was first deputy commissioner of New York City's Hospitals Department, he told a state legislative committee that the existing method of paying for health and hospital care was ''a disaster.''

''The vast majority of our population in suburban, urban and rural areas is not receiving convenient and economically produced quality health services,'' he said. Because of Medicaid cutbacks, he added, hospitals that had expanded health services to the poor in the city were ''on the brink of fiscal disaster.''

Robert Alan Derzon was born in Milwaukee on Dec. 30, 1930, one of two sons of Matthew and Mildred Gordon Derzon. Mr. Derzon graduated from Dartmouth in 1953 and received a master's degree in 1955 from the Amos Tuck School of Business at Dartmouth. In 1956, he received a master's degree in public health administration from the University of Minnesota.

From 1960 to 1966, Mr. Derzon was associate director of the New York University Medical Center. He was first deputy commissioner of New York's hospital department from 1966 to 1969 and acting commissioner in 1970. Before being appointed to the federal post, he was director of the University of California's medical school hospital in San Francisco.

Mr. Derzon's wife of 54 years, the former Margo Harris, died in 2002. Besides his son Mike, he is survived by another son, James; a daughter, Andrea Merenluoto; his brother, Gordon; and nine grandchildren.